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Exhibit 10.1 Employment Contract between Cerion Technologies Inc. and David
Peterson as President and Chief Executive Officer
EMPLOYMENT CONTRACT
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THIS AGREEMENT made this 25th day of June, 1996, between CERION
TECHNOLOGIES INC., A DELAWARE Corporation, with offices located at 1401
Interstate Drive, Champaign, Illinois, hereinafter called "Employer", and DAVID
PETERSON, hereinafter called "Employee".
WITNESSETH:
WHEREAS, Employer desires to employ Employee for a time certain and the
Employee desires to provide services to the Employer for a time certain; and,
WHEREAS, each party to this Agreement is agreeable to the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter contained, the parties agree as follows:
1. EMPLOYMENT. The Employer represents that it is a Corporation engaged in
business with its principal office located at Champaign, Illinois. The Employer
hereby employs the Employee and Employee hereby accepts employment from the
Employer upon the terms and conditions set forth herein.
2. TERM. The term of this Agreement shall begin on the 25th day of June,
1996, and shall automatically renew itself each day for a continuing term of
three years, it being the intent of the parties that this Employment Contract
renew itself daily for a continuing three year term. In the event of termination
of Employee's employment by Employer, prior to the end of the continuing three
year term, for a reason other than cause, Employee shall be entitled to the
benefits
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described below: two years of salary continuation (excluding bonuses) and two
years of health insurance, life insurance, and disability insurance; provided,
however, that Paragraph 12 below shall apply instead of this Paragraph 2 if such
termination takes place within three years of a "change of control".
3. COMPENSATION. For all services rendered by the Employee under this
Agreement, the Employer shall pay the Employee compensation in accordance with
the compensation authorized by the Board of Directors, said compensation to
continue until modified by the Board of Directors on an annual basis.
4. EMPLOYEE COVENANTS. Employee promises and agrees to abide by the
following representations:
(a) Employee agrees that Employee will not engage in any other gainful
employment without the prior written consent of the Employer.
(b) Employee agrees to devote Employee's best efforts to the promotion
of the Corporate business and agrees to represent the Corporation in the
best manner possible.
(c) Employee recognizes and agrees that the services of Employee are
special and unique, and that Employee has a special fiduciary duty to
Employer based on Employee's position and access to information and that
for these reasons, a Covenant on the part of Employee not to compete during
his employment and for a reasonable period after the termination or
expiration of such employment, is essential to protect Employer.
Accordingly, and in consideration of Employer's covenants and agreements
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Employee agrees that for the
Restricted Period, neither the Employee nor any person or entity
controlled, directly or indirectly, by the Employee, whether individually
or as an Officer,
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Director, Employee, Consultant, Partner, or Owner of more than 1% of the
equity interest in any Corporation or other entity, shall, directly or
indirectly (i) in the United States, engage in, or render any services in
connection with, any Business that is Competitive, directly or indirectly,
with the businesses (including, without limitation, the Disk Business)
carried on by Employer at or prior to the termination or expiration of the
Employee's employment by Employer, or (ii) interfere with the business
relationships (whether formed heretofore or hereafter) between Employer and
any of its customers and suppliers. The term "Disk Business" shall mean the
manufacture, processing, or sale of substrates for disks used in the hard
disk drives of computers, network servers, or storage devices and
substrates for organic photoconductor drums. The term "Restricted Period"
shall mean the period from the date hereof until a date one year after the
termination or expiration of the Employee's employment with Employer, or in
the event Employer pays Employee following termination based on the terms
of this Agreement, the period will be from the date hereof until a date one
year after the final payment made to Employee pursuant to this Agreement.
The term "Business that is Competitive" shall mean a business which markets
products in the United States which are competitive, directly or
indirectly, with the businesses carried on by Employer whether those
businesses operate from within the United States or outside the United
States.
(d) During the Restricted Period, neither the Employee nor any person
or entity controlled, directly or indirectly, by the Employee, shall,
directly or indirectly, hire, retain (including as a Consultant), solicit
or encourage to leave the employment of Employer, any employee of Employer,
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or hire or retain any former employee of Employer who has left such
employment within one year prior to such hiring or retention.
(e) Employee agrees that all rights to discoveries, inventions,
improvements, and innovations (including all data and records pertaining
thereto) which relate to the business of Employer, whether or not
patentable, copyrightable, or reduced to writing which the Employee may
discover, invent, or originate during the Restricted Period, either alone,
or with others, and whether or not during working hours, or by the use of
the facilities of Employer ("Inventions") shall be the exclusive property
of Employer. The Employee shall promptly disclose all Inventions to
Employer. Whether during the term of this Agreement or thereafter, the
Employee shall execute at the request of Employer any assignments or other
documents Employer may deem necessary to protect or perfect its rights in
any Inventions, and shall assist Employer, at Employer's expense, in
obtaining, defending, and enforcing Employer's rights therein. The Employee
hereby appoints Employer as the Attorney-in-Fact for Employee to execute on
Employee's behalf any assignments or other documents necessary by Employer
to protect or perfect its rights to any Inventions.
(f) Employee agrees that during and after the period of Employee's
employment by Employer, the Employee and any person or entity controlled
directly or indirectly by the Employee shall maintain in confidence and
shall not directly or indirectly, disclose, sell, use, publish, make copies
of, or communicate to any person, firm, or Corporation any confidential
information, trade secrets, or proprietary data of Employer of which
Employee learns or learned or to which
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Employee has or had access during the course of the Employee's employment
by Employer. The term "confidential information, trade secrets, or
proprietary data" means any information concerning any matters affecting or
relating to the business of Employer, including, without limiting the
generality of the foregoing, any Inventions, improvements, and enhancements
(whether patentable or not); patents or patent applications; any
protectable technology, know-how, and copyrightable material; trade
secrets, including any formulas, patterns, devices, machines, processes,
compilations of information, or expenditures of time or money; product
designs and developments; research reports, market studies and plans;
customer lists; the prices Employer obtains or has obtained from the sale
of, or at which it sells or has sold, its products or services; estimates,
bids, and projections; or any other information concerning the business of
Employer, its manner of operation, its plans, policies, processes,
strategies, or other data, and including any information as to the
existence or terms and provisions of this Agreement, without regard to
whether any or all of the foregoing are or would be deemed confidential,
material, or important, it being agreed that the same are confidential,
material, and important, and gravely affect the effective and successful
conduct of Employer's business and Employer's goodwill, and that any breach
of the terms of this provision shall be a material breach of this
Agreement, and will result in immediate and irreparable harm to Employer;
provided, however, that nothing shall be considered "confidential
information, trade secrets, or proprietary data" which is or becomes known
to the public by acts of others (other than other
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signatories to this type of Agreement with Employer) or through the normal
or other authorized course of operation of Employer.
All memoranda, notes, lists, records, and other documents (and all
copies thereof) made or compiled by the Employee or any person or entity
controlled, directly or indirectly, by the Employee, or made available to
the Employee or any person or entity controlled, directly or indirectly, by
the Employee concerning the business of the Employer, shall be Employer's
property and shall be delivered to Employer promptly upon the termination
of the Employee's employment by Employer.
(g) The benefits of the Employee's agreements and covenants in this
Section 4 may be assigned without notice to or consent of the Employee to
any acquiror of Employer or all, or substantially all of the assets in a
sale, and the Employee hereby unconditionally and irrevocably consents to
any such assignment, and furthermore, agrees to be bound by the provisions
of this Section 4, notwithstanding any sale of Employer, or any assignment
of the benefits of this Section 4 in connection with any such sale.
(h) Employee acknowledges that damages for breaches of the covenants
contained in this Section 4 are difficult, if not impossible to prove
precisely; therefore, it is agreed that the provisions of this Agreement
shall be enforceable by injunction. If any of the restrictions contained in
this Agreement hereof shall be deemed to be unenforceable by reason of the
extent, duration, or geographical scope or other provision hereof, then the
parties hereto contemplate that the Court or other body having jurisdiction
over the matter shall reduce
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such extent, duration, geographical scope, or other provision hereof, and
enforce the affected provisions of this Agreement in reduced form for all
purposes in the manner contemplated hereby, and the parties hereto agree
that such provisions of this Agreement, as so modified, shall be valid and
binding as though any unenforceable provisions had not been included
therein.
5. CORPORATE FACILITIES. The Employer shall furnish the Employee with
suitable working space and other facilities which are necessary for Employee's
position and adequate for the performance of Employee's duties.
6. EXPENSES. The Employer shall furnish or shall reimburse Employee for
actual expenses incurred in connection with the performance of Employee's duties
provided that the expenses were incurred on behalf of the Employer and were
authorized by Employer.
7. FRINGE BENEFITS. Fringe benefit plans which have been installed by the
Corporation for the benefit of Employees in accordance with appropriate Board of
Director resolutions shall apply to Employee in accordance with the particular
fringe benefit involved. The Board of Directors policy regarding vacation plans,
sick leave, medical insurance, and any additional fringe benefit plans which may
be approved by the Board of Directors shall apply to Employee without
discrimination in accordance with the provisions of the Corporate plan for the
Employee's particular class of employment.
8. DUTIES. The Employee accepts employment as President of the Employer and
agrees to perform those duties assigned to Employee by the Board of Directors of
the Corporation.
9. ENTIRE AGREEMENT. This is the entire agreement between the parties and
embodies all forms of compensation which shall become due to Employee, but
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is subject to modification for the purpose of adding additional benefits and
compensation due to the Employee when directed by the Board of Directors of the
Company. This Agreement supersedes all prior Agreements between Employee and
Employer and Employee and Nashua Corporation, or any of its subsidiaries,
relating to termination of employment.
10. DISCHARGE FOR CAUSE. Employer shall have the right to discharge
Employee at any time, for cause, without notice. A discharge for cause shall
include the following: If Employee is convicted of a crime under the laws of the
State of Illinois or the United States, other than those laws involving a
traffic violation; is involved in fraudulent conduct in connection with the
affairs of the Employer, a customer, or a member of the public; violates
Employee's duty of loyalty to the Employer by assisting competitors of Employer;
or Employee acts in such a manner that the actions clearly bring discredit to
the name of Employer. In case of a discharge for cause, this Agreement will
immediately terminate, and Employer shall have no obligation to compensate
Employee after the termination of employment for cause.
11. GOVERNING LAW. This Agreement and the performance hereof shall be
construed and governed in accordance with the laws of the State of Illinois.
12. CHANGE OF CONTROL. If within three years after a "change of control" of
the ownership of Employer, Employee's employment is terminated by Employer for a
reason other than cause, or if Employee terminates for "good reason", Employee
shall be entitled to the benefits described below:
Three times the Employee's highest annual salary (including bonuses)
per annum paid by the Employer to Employee in any one of the three calendar
years prior to termination of employment, providing such amount shall not be
greater than $1.00 less than three times the Employee's "base amount" as defined
in the
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Internal Revenue Code, Section 280(g), as amended from time to time. Payment
shall be made within 30 days of the date of termination.
The term "change of control" shall mean (1) the time of approval by
the Shareholders of the Employer of (A) any consolidation or merger of the
Employer in which the Employer is not the continuing or surviving Corporation or
pursuant to which shares would be converted into cash, securities, or other
property, other than a merger in which the holders of stock immediately prior to
the merger will have the same proportionate ownership of common stock of the
surviving Corporation immediately after the merger, (B) any sale, lease,
exchange, or other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of the Employer, or (C)
adoption of any plan or proposal for the liquidation of dissolution of the
Employer; or (2) the date on which any "person" (as defined in Section 13(d) of
the Securities Exchange Act of 1934), other than Nashua Corporation, a Delaware
Corporation ("Nashua"), the Employer or a subsidiary or employee benefit plan or
trust maintained by the Employer or any of its subsidiaries shall become
(together with its "affiliates" and "associates", as defined in Rule 12b-2 under
the Securities Exchange Act of 1934) the "beneficial owner" (as defined in Rule
13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of
more than 50% of the stock outstanding at the time.
For purposes of this Agreement, "good reason" means:
(a) (i) The assignment to Employee of any duties inconsistent in any
respect with Employee's position (including status, offices, titles, and
reporting requirements), authority, duties, or responsibilities immediately
prior to the change in control or (ii) any other action by the Employer
which results in a diminishment in such position, authority, duties, or
responsibilities, other than an insubstantial and
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inadvertent action which is remedied by the Employer promptly after receipt
of notice thereof given by Employee;
(b) Any failure by the Employer to comply with any of the provisions of
this Agreement, other than an insubstantial and inadvertent failure which
is remedied by the Employer promptly after receipt of notice thereof given
by Employee;
(c) The Employer's requiring Employee to be based at any office or
location more than 35 miles from Champaign, Illinois, except for travel
reasonably required in the performance of responsibilities;
(d) A reduction in salary (including bonuses) from the level prior to
the change of control; or
(e) Any failure by Employer to comply with or satisfy the provisions of
Paragraph 13(b) hereof.
13. BINDING EFFECT.
(a) This Agreement shall be binding upon and inure to the benefit of the
Employer and any successor of the Employer. Neither this Agreement nor any
rights arising hereunder may be assigned or pledged by Employee. This Agreement
shall inure to the benefit of and be enforceable by Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees.
(b) In the event of a change of control of Employer, any parent company or
successor to all or substantially all the assets of the Employer shall, in the
case of a successor, by an agreement in form and substance satisfactory to
Employee, expressly assume and agree to perform this Agreement and, in the case
of a parent company, by an agreement in form and substance satisfactory to
Employee, guarantee and agree to cause the performance of this Agreement, in
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each case, in the same manner and to the same extent as the Employer would be
required to perform if no change of control had taken place.
(c) If Employee should die while any amount would still be payable to
Employee hereunder if Employee had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to Employee's legatee or other designee or, if there be no such
designee, to Employee's estate.
IN WITNESS WHEREOF, this Employment Contract has been executed by Employer
and Employee on the date first above written.
EMPLOYER:
CERION TECHNOLOGIES INC.:
By:
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President
EMPLOYEE:
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DAVID PETERSON
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